India, one of the fastest growing eCommerce markets, has become the latest battleground between overseas e-retailing giants, Amazon.com, Inc (NASDAQ:AMZN) and Alibaba Group Holding Ltd (NYSE:BABA), as well as home-bred start-ups like Quikr, Snapdeal and Flikr.
India: Lucrative Open Market for eCommerce
Both Alibaba Group Holding Ltd (NYSE:BABA) and Amazon.com, Inc (NASDAQ:AMZN) are attempting to capture a large portion of the $25 billion eCommerce Indian market. The growth of this new and as yet relatively unexplored territory is expected to reach 40% per year over the coming years.
Driving the eCommerce revolution in a country where many far-flung villages are yet to be electrified, is the country’s growing use of smartphone technology. Even as many households do not have a basic PC connection, there are mobile phone or basic smartphone connections driving mobile commerce.
Expectantly, Alibaba and Amazon. hope to tap the unexploited potential that mCommerce in India has to offer. But the rosy picture of super sized profits is diluted as eCommerce players take stock of the yet-to-be developed logistics, as well as payment infrastructure.
Both of the world’s largest e-retailing giants, Alibaba Group Holding Ltd (NYSE:BABA) and Amazon.com, Inc (NASDAQ:AMZN) hold strong native market shares in China and the US. Now, the retail giants are turning their attention to India, who has the largest middle class in the world.
Already, the Alibaba Group holds a stake in a local mobile payment platform – Paytm Mobile Solutions Pvt.
The lure of Indian shores for these large-sized virtual market players is the open market and the massive consumer base. However, the battle is expected to be a difficult one for Alibaba and Amazon.com, Inc (NASDAQ:AMZN), as the Indian government allows only 51% ownership in an eCommerce company for overseas retailers.